Multiple Choice
Assume that British interest rates are higher than U.S. rates, and that the spot rate equals the forward rate. Covered interest arbitrage puts ____ pressure on the pound's spot rate, and ____ pressure on the pound's forward rate.
A) downward; downward
B) downward; upward
C) upward; downward
D) upward; upward
Correct Answer:
Verified
Correct Answer:
Verified
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